Layoffs in tech

Yet another venture-backed technology company is cutting staff in the Seattle area.

The latest to drop the ax is CapitalStream. The Seattle company, whose software is used by financial services companies, cut five employees in engineering.

Kevin Riegelsberger, president and chief executive of CapitalStream, said the cuts occurred because it recently completed development on a new product offering that will be unveiled in December. The layoffs represent five percent of the company’s work force.

“We are growing tremendously,” said Riegelsberger, whose company moved into a larger headquarters in downtown Seattle earlier this year. “We are in the midst of heavy growth.”

The cuts at CapitalStream follow a string of small layoffs at other technology companies. In the past few weeks, Revenue Science, DocuSign, GraniteEdge Networks and Pacific Edge Software have all cut staff.

I am not sure if this represents a bigger trend, since the companies are in diverse industries ranging from online advertising to project management software. And, of course, the cuts are nowhere near what occurred during the dot com bust when more than 20,000 people lost jobs in Seattle’s tech sector (see full list on my layoff tracker).

But I am watching to see if this activity accelerates in the coming months.

One theory is that companies are doing some year end planning in preparation for 2007.

A person who was familiar with the CapitalStream layoffs said the company didn’t make its numbers in the past quarter and was unable to close an important deal in time.

But Riegelsberger said that was not true, adding that the company has been cash flow positive for more than a year.